May 15, 2019 / 7:53 AM / 2 months ago

MUFG's annual profit slides 12% as low interest rates, credit card unit weigh

TOKYO, May 15 (Reuters) - Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) on Wednesday reported a 12% decline in annual net profit, held back by razor-thin lending margins and hit by a one-time charge at a credit card unit.

MUFG, Japan’s largest bank by assets, posted 873 billion yen ($8 billion) net profit for the year to March 2019, from 990 billion yen a year earlier. The result compared with an average forecast of 979 billion yen in a poll of 15 analysts by Refinitiv.

The bank was hit by costs related to suspending development of a new system at its credit card unit, due to increased competition from cashless services.

MUFG and other Japanese banks have been suffering diminishing returns from loans to both retail and corporate customers as the central bank pursues an ultra-low interest rate policy aimed at stimulating the economy.

In 2017, MUFG announced plans to automate almost 10,000 jobs at its core banking unit by 2024, to try and reduce the impact that the central bank’s negative interest rates has had on profit margins. ($1 = 109.5100 yen) (Reporting by Junko Fujita; Editing by David Dolan and Christopher Cushing)

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